T-Mobile just announced its new JUMP! upgrade plan (no more caps after that, I promise), and it's really, really different. Really, really. As far as I am aware, no other mobile network in the world has a smartphone upgrade plan like this. If you haven't already read about the basics on Jump, let me break it down for you.

Jump allows you to upgrade your T-Mobile smartphone on one of the carrier's new Simple Choice plans every 6 months. The gist is that you pay a $10 fee every month on top of your existing bill (this fee includes phone insurance, which is awesome), and you sign up for this fee when you buy a smartphone on a Simple Choice plan. You pay the normal device upfront cost (a "down payment"), usually between $99 and $150, and the same $20 / month (subject to credit approval) no-interest installments to pay off the phone. Except after 6 months of these payments, T-Mobile will let you get a new phone (again, same down payment and monthly installments), and you trade in your old one. (It's not clear at this point if condition of your trade-in is in any way pertinent to upgrade eligibility.) (Per The Verge - A $20-170 deductible may be charged at trade-in time if your phone is not deemed in good enough condition.)

Think of it like leasing a car. You are, basically, leasing a phone. You can choose to keep it as long as you want, and you're not obligated to ever return it if you don't use a Jump upgrade. You just pay it off like any other T-Mobile phone. Or, you can trade it in after 6 months and get a new one.

Now it's time for math: does this financially make sense? Bear with me here, because the numbers are going to get a little dense.

I want to upgrade my phone every 6 months: do I buy outright, or use Jump?

This is the big idea T-Mobile is selling people with the Jump plan, so let's see just how much you'll save by upgrading with this new system as opposed to buying your phones outright (on T-Mobile).

Scenario: I want to buy two phones a year, on T-Mobile.

If I bought my first phone and second phones on Simple Choice Jump! upgrades?

Monthly service cost (with phone / Jump payments)

Hardware cost

Annual cost

100 (x12)

100-150 (x2)

$1400-1500

This is pretty cheap! Like, actually really cheap. And you get included phone insurance as an added bonus.

If I bought my T-Mobile phones off contract?

Monthly service cost

Hardware cost

Annual cost

70 (x12)

600-700 (x2)

$2040-2240

So, this number is a lot bigger, but there are a couple mitigating factors to consider right off the bat. First, the phones are yours to keep without extra charge, because you paid for them in full. They're also yours to sell. Any reasonably cared for high-end smartphone is going to fetch 40-70% of its retail value on the used market 6 months after being purchased. So, the total can be significantly reduced by selling your old phone yourself. If you were to do this, it would bring down the annual cost to $1620 to $1980.

It is still more expensive than the Jump plan, however. You also don't get that handy included phone insurance, which is super nice to have.

The other potential wrench in the economic works here is Nexus phones. If you're buying a Nexus handset, it's going to change the numbers for hardware cost substantially, and if Google keeps up this whole "really cheap unlocked phone" philosophy on Nexuses in the future, Nexus diehards will get little in the way of savings from Jump.

Scenario: I want to buy one phone a year, on T-Mobile.

If I bought my first phone on T-Mobile and signed up for Jump! upgrades?

Monthly service cost (with phone / Jump payments)

Hardware cost

Annual cost

100 (x12)

100-150

$1300-1350

As you can see, the Jump upgrade plan very quickly loses value if you don't upgrade twice a year. The difference in cost is so minute that there is no reason not to upgrade twice a year on Jump.

If I bought my T-Mobile phone off contract.

Monthly service cost

Hardware cost

Annual cost

70 (x12)

600-700

$1440-1540

The outright purchase option is only moderately less economical in this circumstance, and the longer you wait to use your Jump upgrade, the smaller the dollar gap between the two options becomes. And again, if you go for a Nexus phone, outright purchase is actually cheaper once all's said and done.

In fact, a 16GB Nexus 4 purchased from the Play Store with a $10 / month 3rd party insurance plan would only end up costing about $10 more per year than the Jump plan in this scenario. Again, it really doesn't make sense not to maximize your upgrades on Jump, the second handset down payment is negligible next to the total cost of your service annually.

Compared to other carriers?

There's really not even an argument: T-Mobile is cheaper than the other members of the big four in the US. Upgrading your phone on AT&T or Verizon every 6 months with comparable service to T-Mobile's Simple Choice 2GB plan, for example, would probably be around $2000-2500 a year (first phone bought on-contract, and then minus anything you get back from selling your it), compared to $1280-1380 a year on T-Mobile's Jump upgrades with a 2GB plan. I'm not going to do the detailed math because, frankly, it's not worth the effort. We all know the other guys are more expensive in pretty much every sense of the word.

Should I get a Jump plan?

That all depends. First, you need to be willing to live with T-Mobile service, and depending on where you live, that can be easier said than done. If you're already planning on or have purchased a device on down payment with a Simple Choice plan, there is really no reason not to get in on Jump. You get to upgrade your phone more often without worrying about selling your old one (or breaking / losing it), and it's just $120 more a year. If I were a T-Mobile customer planning on sticking around for a while, this would be a very attractive value proposition for me.

If you're a "Nexus only" sort of person, or buy your phones off-contract typically (and not very often), though, the Jump plan makes less sense. That's a pretty small audience, though.